Five Key Tips for Women and Minorities Seeking Franchise Ownership

The only real challenge for prospective owners is finding the opportunity that suits you best.

By Martha O'Gorman

When Gina Pinto Williams came to the U.S. from Peru in 1999, she couldn’t drive and she couldn’t speak English. Neither fact deterred Gina from her goal of owning her own business. She knew she had several steps to take along the way and that the road wouldn’t be easy, but Gina was committed and in 2008 she and her husband, Michael, became franchise business owners. Gina’s story may seem unique, but similar realities play out across the landscape as women and minorities take ownership of franchised businesses. A 2011 report for the IFA Franchise Education and Research Foundation found that nearly 21 percent of franchised businesses were owned by minorities, compared to about 14 percent of non-franchised businesses. Women owned nearly 21 percent of franchised businesses and 24 percent had dual male-female owners. Franchises present an excellent opportunity for any prospective business owner. The franchise business environment is a collaborative one, where owners freely exchange ideas and information. Franchised businesses are also family-friendly, so owners don’t feel that work-life tug-of-war. Many turn their dream of business ownership into a family dream. Women and minorities have thrived as franchise owners. The franchise business model is one reason, but choosing the right opportunity is also important. So, along with finding a franchisor that has a solid apparatus, is responsive to franchisee needs, and has a vision for future growth, women and minorities need to be aware of the stumbling blocks that still exist for them, including access to capital and locating quality mentors. Both are key to building a successful business. For Gina, finding a quality mentor was a lifesaver. “My mentor taught me what I needed to know and took me to seminars, networking events and lunches.” she said. “He erased any fears, questions or doubts I had about myself and my business and empowered me to succeed.”

HERE ARE SOME TIPS FOR WOMEN AND MINORITIES CONSIDERING FRANCHISE BUSINESS OWNERSHIP:

1. Think seasonal
We all want workplaces that bend a little to our lives. Franchise business ownership affords that opportunity because it allows you to set a work schedule that makes work and life fit better together. But those who seek even more flexibility should consider seasonal franchises. The work is intense during peak times, but the intensity lasts for only a portion of the year. After the season is over, downtime is plentiful. Parents who own seasonal franchise businesses are able to devote more time to their children’s activities, coaching youth sports or participating in school outings. Those who aren’t parents find more time for themselves, either vacationing, volunteering or operating an additional
seasonal business.

2. Make your values matter
Passion is an essential ingredient in business ownership. When researching franchise opportunities, home in on those that share your values and principles. This will help fuel your passion and reach your business goals. You should ensure that the franchisor understands its target audience and works to meet the needs of that audience.

3. Consider community outreach
Walmart did research several years ago and foundthat “90 percent of female customers in the U.S.would go out of their way to purchase products fromwomen, believing they would offer higher quality.” In other words, all types of customers will walk into your business, but customers who are most like you will seek you out. You will want to engage that audience and demonstrate that you are part of the community. For that reason, you should seek a franchisor that understands the value of community outreach and encourages franchisees to participate in, or sponsor, community events. The best franchisors will have tools available to help franchisees sponsor and promote community events.

4. Identify sources of capital 
This is particularly important, because access to capital has long been an issue for women and minority entrepreneurs. Many tend to depend on personal savings as a main funding source because they believe they will be turned down for credit. That can be problematic because in your first, crucial year, personal savings may disappear as you try to establish your business in the community. Seek out sources where you can access capital and improve your chances for success. The U.S. Small Business Administration, for example, is an excellent resource. The SBA offers online tools, in-person assistance and training to help small-business owners apply for loan. SBA LINC connects borrowers with SBA approved lenders. Don’t let fear or past experience discourage you from seeking out lenders who can provide muchneeded access to capital.

5. Find a great mentor
It’s rare that a new franchisee doesn’t need a shoulder to lean on. Mentors are key. They answer questions and teach franchisees what they need to know about business ownership. More importantly, they can help manage the worries that inevitably creep into any new business owner’s mind. “Why did I do this?” “Can I succeed?” “Did I make a mistake?” SCORE is a resource that has helped thousands of new business owners with its network of more than 13,000 volunteers. It provides free and confidential counseling, mentoring, and advice for small business owners. Take advantage of the services offered by SCORE and other organizations, including:

• IFA’s Women’s Franchise Network consists of local networks where women franchising professionals can build relationships, address issues, share ideas and offer solutions related to franchising.
• Minority Business Development Agency has a network of more than 40 MBDA Business Centers that help minority business owners gain access to capital and create jobs.
• Asian American Business Development Center and its Business Mentorship Network provide a network of mentors from a wide range of business and industry.
• United States Hispanic Chamber of Commerce promotes growth of Hispanic-owned businesses. 

The franchise business model is a winning one. For Gina, it has allowed her to grow as a business owner while keeping her focus on family. For the U.S. economy, it has proven to be a powerful engine. For the past five years, franchise business growth has exceeded non-franchise business growth, according to IFA’s Franchise Business Outlook: 2016. The trend is expected to continue this year.

So, after taking these tips to heart, the only real challenge for prospective owners is finding the opportunity that suits you best.

Martha O’Gorman is chief marketing officer for Liberty Tax Service and a franchisee and area developer as well. Find her at fransocial. franchise.org.